EU Censures Bulgaria By Freezing Aid

The EU imposed unprecedented penalties on one of its members yesterday, freezing €500m (£400m) in aid to Bulgaria because of its failure to combat corruption, organized crime and misuse of EU funds.

Bulgaria joined the EU just over 18 months ago but a European commission report said the ex-communist country had done little or nothing to reform its judiciary and that most crimes by organized gangs and corruption went unpunished.

The commission suspended payments totalling €486m from three EU funds, warned that structural funds worth up to €7bn over the next six years were at risk, and barred two Bulgarian payment agencies from receiving money from Brussels.

Romania also joined the EU in January 2007 but escaped financial sanctions, despite another commission report indicating that judicial reforms are fragile, decisions on high-level corruption are highly politicized and few cases end in sentences or penalties.

Senior officials insisted that the twin reports did not amount to a root-and-branch condemnation of the EU's newest members but sent a message of vigilance and encouragement. They added that the two countries' entry remained justified and the reports cast no doubt on the benefits of EU enlargement, despite criticism Bulgaria and Romania joined prematurely.

But observers said they sent an unmistakable signal to candidate countries such as Croatia, Serbia and Turkey about the need to crack down on corruption and to reform their penal codes.

"With anti-corruption reform faltering since EU accession, the cases of Bulgaria and Romania show that EU membership is no magic bullet," Transparency International, the anti-corruption campaign, said.

José Manuel Barroso, the commission president, said the reports were a "reality check" showing that both governments needed to step up their efforts. "They show that the institutions and systems are now in place but tangible results need to be achieved in investigating, prosecuting and judging cases of high- level corruption and organized crime," he said.